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Bruce Said:

example of national fiscal policies that can affect mortgage rates, housing starts, and housing prices?

We Answered:

In the US, there is no fiscal policy that will affect the mortgage rates,housing starts and housing prices, except the crounding out effect. When the government has borrowed money from the public,it will affect the market interest rate. In developing countries, there are a populist policy such as soft loan, tax reduction etc to stimulate the property market.

Tommy Said:

How is that Bush Administration housing boom going with the adjustable mortgage rates?

We Answered:

You should've been watching NBC Nightly News with Brian Williams. They were just doing a report on this very thing. If you get a chance, you can check it out on the nightly webcast (www.msnbc.com then look & click for nightly news) later tonight.

Jeremy Said:

How long will it take for the rise in mortgage rates to lower housing prices?

We Answered:

Mortgage rates are going to hurt the marginal buyer but the other posters are right, there is no perfect correlation between interest rates and home sales. Since many buyers opted for the tax credit and foreclosures are still lurking and increasing in some areas (especially after some banks have recently begun to foreclose again) the number of buyers is down and the inventories are up, this will drive prices down further than any action in interest rates.

Douglas Said:

Will the Housing Bill reduce Mortgage rates?

We Answered:

Unfortunately, rates will not be effected by the Housing Bill. Each lender has their own combination of factors that they base their rates on and these they keep close to their vest. "Trade secrets" if you will. They don't want anyone able to predict what their rates will do. In general, rates follow the 10 Yr. Bond....if the yield goes down, so will rates, if the yield goes up rates will too. Take note: I'm talking about the yield here. The yield opposes the movement so if you see the movement go up by 19/32, the yield will go down and visa versa. I watch money.cnn...if the little arrow is green, it's good, if it's red, it's bad. Right now, the bond closed on Friday at 4.09, a bit high over the past 6 mths or so. Rates have been going up over the past couple of weeks. Another popular factor is what Fannie and Freddie stocks are trading at. When their price goes up, rates go down and visa versa. Other factors: Wall Street activity, unemployment rate, etc. NOW, all of this will not guarantee you a rate increase or decrease. As I stated earlier, no lender will tell you how to predict their rates, but this will give you an idea as to where they're headed. I'm interested that your lender's rates only come out on Thursday? I'm a broker, work with over 100 lenders and get rates daily. If there is significant movement in the indicators, I'll get mid-day price changes...sometimes 2 and 3 per day if there is enough movement in their indicators. They really do keep up with what is currently going on...today...right now, not just on Thursdays. Very few keep their rates for longer than a few days and I'm talking about conventional, prime loans... subprime, commercial, hard money, etc work on different rules. It truly is a gamble...like Black Jack. Do you hold at 16 and be conservative, or see what card comes next? You may have passed up a 7 and will be happy, or you may have passed up a 5 and be upset. You'll kick yourself for making the wrong decision either way...but you just don't know ahead of time. Wish there were more of a definitive answer out there for you. Hope this helps.

Clarence Said:

Econ Question, housing prices/mortgage rates?

We Answered:

If this news gives real interest rates then in short-run people will buy less houses (if they don't expect interest rates to rise further). But it's consequence of fall in supply (houses will be sold for higher prices) on demand-supply graph and fall in demand (higher housing costs).

In case if news gives you nominal rates then conclusion may depend on people nominal income expectations or inflation rate.

Brett Said:

What was the variable first mortgage housing rate in june 1987?

We Answered:

In June, 1987, the 11th District Cost of Funds Index was 7.274 percent. Today, the 11th District Cost of Funds Index is 2.003.

The typical spread on a loan is 2.750 percent. So, in June, 1987, the variable rates on mortgages were about 10.5%

Kathy Said:

How does the removal of tax deductions on mortgage interest rates affect the housing market?

We Answered:

IF the tax deducting were to be removed you will see people not buying as many homes.

There are some people out there that live for tax deductions -
I call them democrats.
Some people will not pay down a mortgage to get the silly tax deduction.
There is a mental block that does not let them realize that you don't get all the interest back.
Just a small part of it.

To me, the tax deduction should have been removed DECADES ago, along with credit card interest being tax deductible.
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